Ordinary shares

Question 1

Entry

Answer 1

Dr Financial assest -i.e Bank

Cr Equity/ financial liability

Question 2

You credit equity if:

Answer 2

If it has no contractual obligation to deliver cash or another financial asset, or
• is not exchanging financial assets or liabilities with a negative outcome for the issuer

Question 3

You credit liability if:

Answer 3

If the financial instrument, from the issuer’s perspective, leads to a contractual obligation to deliver cash or an asset.